Gross national happiness as an answer to the Easterlin Paradox?

The Easterlin Paradox refers to the fact that happiness data are typically stationary in spite of considerable increases in income. This amounts to a rejection of the hypothesis that current income is the only argument in the utility function. We find that the happiness responses of around 350,000 people living in the OECD between 1975 and 1997 are positively correlated with the level of income, the welfare state and (weakly) with life expectancy; they are negatively correlated with the average number of hours worked, environmental degradation (measured by SOx emissions), crime, openness to trade, inflation and unemployment; all controlling for country and year dummies. These effects separate across groups in a pattern that appears broadly plausible (e.g., the rich suffer environmental degradation more than the poor). Based on actual changes from 1975 to 1997, small contributions to happiness can be attributed to the increase in income in our sample. Interestingly, the actual changes in several of the ‘omitted variables’ such as life expectancy, hours worked, inflation and unemployment also contribute to happiness over this time period since life expectancy has risen and the others have, on average, fallen. Consequently the unexplained trend in happiness is even bigger than would be predicted if income was the only argument in the utility function. In other words, introducing omitted variables worsens the income-without-happiness paradox.     

A new challenge to our brains: Finding the knowledge construct for world-level problems

If the ultimate resource is the human brain, the critical question is, “How well are we using it?” For the past 200 or so years we have concentrated on one capability—the power to reason, and in so doing have lost sight of the social and cultural components of knowledge. The new challenge is therefore to construct knowledge that is valid across the many societies and cultures in the world to enable world problems to be tackled in a world, rather than in a one- or two-culture, context.The purpose of this paper is to outline the limitations to knowledge constructed on a primarily rational basis and to propose how to go beyond them. These limitations encourage the reduction of the problems to a quantitative basis, and hence emphasize the measurable aspects of issues, usually the economic and the military. Unfortunately, as Stafford Beer pointed out many years ago, problems cannot be solved within their own context but only within a larger context. Present attempts to attain peace through measures of quantifiable destructiveness are therefore unlikely to prove effective. The way out, as Kenneth Boulding has noted, is to reformulate world problems in terms of peace, since the criteria for stable peace are not necessarily identical with those for the non-outbreak of war. One corollary is the need to reconstruct our knowledge using the whole brain, and in doing so, provide a knowledge basis valid across different societies and cultures. This is indeed a new, and very real, extension and challenge to the use of our brains.